Elliott Crane Service, Inc. v. H.G. Hill Stores, Inc.

• Decision Date: 29 July 1992
• Citation: 840 S.W.2d 376
• Parties: ELLIOTT CRANE SERVICE, INC. and Chris Elliott, Plaintiffs/Appellants, v. H.G. HILL STORES, INC., Defendant/Appellee.
• Court: Tennessee Court of Appeals

Page 376

840 S.W.2d 376

ELLIOTT CRANE SERVICE, INC. and Chris Elliott, Plaintiffs/Appellants, v. H.G. HILL STORES, INC., Defendant/Appellee.

Court of Appeals of Tennessee,

Middle Section, at Nashville.

July 29, 1992.

Application for Permission to Appeal

Denied by Supreme Court

Oct. 26, 1992.

Keene W. Bartley, Schulman, LeRoy & Bennett, P.C., Nashville, for plaintiffs/appellants.

John P. Branham, John J. Britton, Mary M. Bers, Howell, Fisher & Branham, Nashville, for defendant/appellee.

OPINION

TODD, Presiding Judge.

The plaintiffs, Elliott Crane Service, Inc., and Chris Elliott, have appealed from the non-jury judgment of the Trial Court dismissing their suit against the defendant, H.G. Hill Stores, Inc., for declaratory judgment in regard to the rights of the parties under an equipment rental-indemnity agreement.

On December 8, 1987, a crane owned by Elliott Crane Service, Inc., and operated by its employee, Chris Elliott, was engaged in an operation on the premises of defendant when one of defendant's employees was injured, and he has sued plaintiffs for damages.

On August 24, 1989, this suit was filed alleging a rental agreement between Elliott Crane Service, Inc., and defendant containing the following provision:

2. INDEMNIFICATION: Lessee agrees that the equipment and all persons operating such equipment, including Lessor's employees, are under Lessee's exclusive jurisdiction, supervision and control and agrees to indemnify and save lessor, its employees and agents harmless from all claims for death or injury to persons, including Lessor's employees, and from all loss, damage or injury to property, including the equipment, arising in any manner out of Lessee's operation. Lessee's duty to indemnity hereunder shall include all costs or expenses arising out of all claims specified herein, including all court and/or arbitration costs, filing fees, attorneys fees and costs of settlement.

Lessee shall not be required to indemnify Lessor for its sole negligence, but, Lessor's liability for damage caused by the sole negligence of Lessor, its agents and employees, hereunder shall be limited to the amount of Lessor's liability insurance.

The complaint further alleged that the injured employee had sued plaintiffs for damages and prayed that:

2. That the court, upon a hearing, enter a declaratory judgment requiring Hills to indemnify and hold harmless Elliott Crane and Chris Elliott for any injuries occurring to Eddie L. Beard during the course of the crane rental occurring on December 8, 1987.

The answer admitted that defendant rented a crane from Elliott Crane Service, Inc. on December 8, 1987; that Chris Elliott was the operator of that crane, that the signature on the rental agreement appeared to be that of an employee of defendant, denied any liability for indemnity, denied any control over the operator of the crane or liability for his actions, and affirmatively pled T.C.A. § 28-3-104, the statute of limitations for personal injury.

Upon hearing the cause, the Trial Court entered judgment stating:

At the close of the plaintiffs' proof, the defendant moved the Court, pursuant to Rule 41.02, T.R.C.P., to dismiss the plaintiffs' case based upon T.C.A. § 62-6-123 and Hill Stores' lack of bargaining upon and assent to the terms of the alleged agreement sought to be enforced by the plaintiffs.

After listening to the argument of counsel and reviewing the record as a whole, the Court was of the opinion that the defendant's motion was well taken and should be granted because the alleged agreement sought to be enforced by the plaintiffs was against public policy, void and unenforceable, and violated T.C.A. § 62-6-123. Accordingly,

It is ORDERED, ADJUDGED and DECREED that the defendant's motion to amend its answer to rely upon T.C.A. § 62-6-123 is hereby granted.

....

It is FURTHER ORDERED, ADJUDGED and DECREED that the defendant's motion to dismiss at the close of the plaintiffs' proof pursuant to Rule 41.02, T.R.C.P., is hereby granted and the plaintiffs' case is dismissed with prejudice.

It is FURTHER ORDERED, ADJUDGED and DECREED that the findings of the Court are incorporated herein by reference.

The Trial Court did not file a written finding of facts and conclusion of law, but the Trial Clerk has certified to this Court an unsigned, unauthenticated transcript of "Findings of the Court" which states:

On review of the motion under Rule 41.52 of the Tennessee Rules of Civil Procedure the court finds that the indemnification agreement found in the contract .02, designated Exhibit 1 in the record, falls within provisions of 62-6-123; and therefore, the, indemnification agreement is against public policy or it's void and unenforceable. Having so found the court finds it unnecessary to consider the other ground raised in the motion to dismiss....

On appeal, plaintiff presents the following issues for review:

I. Did the Trial Court err in granting the motion to dismiss under Rule 41.02 based upon the facts before the Court?

II. Did the Trial Court err in finding that the indemnity agreement sought to be enforced in the present matter contained in the short term crane rental contract of Elliott Crane Service, Inc. was an agreement in violation of T.C.A. § 62-6-123 rendering said agreement void as a matter of law?

III. Did the result reached by the Trial Court cause an inconsistent status to exist between the defendants Chris Elliott and Elliott Crane Service, Inc. in light of application of the fellow servant rule?

T.C.A. § 62-6-123 reads as follows:

Indemnify or hold harmless agreement invalid.--A covenant promise, agreement or understanding in or in connection with or collateral to a contract or agreement relative to the construction, alteration, repair or maintenance of a building, structure, appurtenance and appliance, including moving, demolition and excavating connected therewith, purporting to indemnify or hold harmless the promisee against liability for damages arising out of bodily injury to persons or damage to property caused by or resulting from the sole negligence of the promisee, his agents or employees, or indemnitee, is against public policy and is void and unenforceable.

The quoted statute is part of Chapter 6 of Title 62 of Tennessee Code Annotated, which chapter is designated as "The Contractor's Licensing Act of 1976."

With the exception of Section 62-6-123, quoted above, every other section of Chapter 6 deals with the licensing of contractors. It is noteworthy that neither the word contractor or contracting is mentioned in Section 62-6-123, which appears to stand alone without dependence upon any other section of the chapter. The instruments declared void and unenforceable are not designated contracts, but "covenant, promise, agreement or understanding."

Plaintiffs insist that § 62-6-123 was not intended to apply to situations such as the present case, but was intended to apply only to architects and/or engineers. The section was enacted as Chapter 225 of the Public Acts of 1967 entitled, "An Act declaring the invalidity of certain indemnity or hold harmless agreements in the construction industry." The pertinent text of the Act, quoted above, is clear and unambiguous and needs no recourse to legislative debate to determine legislative intent. Where the legislative intent has been clearly stated in a legislative act, that intent cannot be limited or modified by any oral expression during debate.

Plaintiffs insist that Elliott Crane Service, Inc., is not a contractor, and is not subject to § 62-6-123. It is uncontroverted that plaintiff corporation is in the business of owning cranes which it uses to furnish crane service to the general public including the construction industry. It is also uncontroverted that the operation out of which the present controversy arose consisted of the removal of air conditioning equipment from the roof of a building as a part of remodeling of the building.

The indemnity agreement was printed on the reverse side of a charge ticket representing the rental of a crane and operator to defendant. The face of the charge ticket contained the details of the charge, including time and charge per hour, and the signature of an employee of defendant to verify the length of time for which charges were due. As stated in American Pecco Corp. v. Concrete Building Systems, Co., U.S.D.C.Ill.1975, 392 F.Supp. 789,

The crane was designed to be used in construction activities. Central cannot logically claim it was unaware of the use to which the crane would be put, when the crane was in fact put to a...